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26.05.2019

*AAKASHAYA PATRA WEEKLY MARKET OVERVIEW:*

It was Modi wave at work as the Modi led BJP registered a thumping victory. A Modi win was never in doubt, but the margin of victory shows how strongly the people of India wanted Modi for the second term. With the economy slowing, Inflation way lower than targeted and Growth showing signs of slowing down the Modi Government has its task cut out. It was an extremely volatile week here Volatility was crushed by more than 45% in the last two days.

A Gap up opening on Monday set the tone for the week as Nifty touched 12000 and Sensex 40000 on Results day. Nifty is now
set for short term target of 12232 and medium term target of 13516. In 2014 post the election results, the Mid-cap index had blasted around 40% in five weeks. Probability of a repeat cannot be ruled out but may be with a slightly reduced percentage returns. Retail investors/traders will now rejoice as the midcaps and small-caps join the party.

TECHNICALLY SPEAKING :-

Sensex opened the week at 38701 made a high of 40124 low of 38570 and closed the week at 39434. Thus it closed the week with a stunning gain of 1504 points. At the same time the Nifty opened the week at 11651,made a high of 12041, low of 11591 and closed the week at 11844. Thus the Nifty closed the week with a gain of 437 points.

On the daily charts, both Sensex and Nifty have formed a Real White body candle with a longer lower shadow which suggests buying at lower levels. It also completes a Bullish Harami pattern, which has little significance as it is formed in an Uptrend. On the weekly charts, both the indices have formed a Real White body candle. Thus Candlestick pattern study suggests a Bullish bias.Both the indices opened with a big Gap-up on Monday, which resulted in a Bullish Breakaway Gap not only on the daily time-frame but
also on weekly time-frame. This Bullish Gap between Sensex 38570-38001 and Nifty 11591-11426 will now act as strong Support Zone as 20dma and 50dma also lie inside this Gap. Both the indices had completed a Bullish Cup & Handle pattern in March 2019 and now they are heading towards their target of Sensex 41053 and Nifty 12232. Both the indices conquered and closed not only
above the short term average of 20dma (Sensex - 38349 and Nifty -11529) but also above the medium term average of 50dma (Sensex -38421 and Nifty 11542). Both the indices continue to remain above the long term average of 200dma (Sensex - 36757 and Nifty - 11054).Thus the Trend in the long term Timeframe continues to be Bullish,whereas the Trend in the medium term as well as short term Timeframe has again turned Bullish.MACD and Price ROC are both positive and in Buy mode. RSI (61) suggests strong Bullish momentum.Stochastic Oscillator %K (72) is below %D and in Sell mode. ADX (34) suggests Uptrend consolidating. Directional Indicators are in Buy mode as +DI is above -DI. MFI (53) suggests Positive Money Flow. OBV is in non-confirmation mode. Thus majority of Oscillators are suggesting a Bullish bias. Volatility Index - India VIX crashed from a high of 30.18 to low of
14.49 in last two days of the week.

It was on expected lines as the Option premiums crashed and Option writers made a killing. Options data for May series indicate highest Call Open Interest is at 12500 and the highest Put build-up is still at the strike of 11000. Thus Options data suggests
a trading range with resistance at 12000 and strong support at 11000.

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